Power Plays S1E07: Co-op EVolution: A Toolkit for Rural Electric Vehicle Adoption

Episode ID S1E07
June 30, 2021

Austin Energy built one of the most comprehensive and successful electric vehicle programs in the country. In this episode of Power Plays, CoBank’s Teri Viswanath and Tamra Reynolds speak with Karl Popham, manager of electric vehicles and emerging technologies at Austin Energy. Popham spearheaded the utility’s EV program, which launched in 2011 and today includes 30 separate initiatives how to engage consumers. Popham provides valuable and rarely heard insights about what EV adoption means from a consumer engagement perspective and shares critical details on load and revenue opportunities.

Transcript

Teri Viswanath: Welcome to Power Plays, a CoBank Knowledge Exchange podcast series, an audio program where we connect you with top energy and environmental innovators and policy-makers who share their insights, experience and market observations. Hello, I'm Teri Viswanath. I'm the Lead Economist for Power, Energy, and Water at CoBank. I'm joined today by cohost and CoBank Regional Vice President Tamra Reynolds. Hey Tamra.

Tamra Reynolds: Hello Teri. For the second part of our two-part series on electric vehicles this month, we are picking up where we left off, from outlining a blueprint for rural electric co-ops, as they intentionally plan for a more accelerated path towards community EV adoption, to the practical outlines of a co-op toolkit for implementing an EV strategy.

Teri: For today's program, we sat down with Karl Popham Austin Energy's Manager for Electric Vehicles & Emerging Technologies. Austin Energy is the country's third largest city-owned electric utility, and has one of the most comprehensive EV programs in the nation and because of the success of that program, Austin Energy was nationally recognized as Plug In America's drive electric utility of the year. I first had the privilege of hearing about that program at a well-attended Wood Mackenzie event in Austin a few years back and Karl was a memorable speaker. Like our speakers on the first of our EV series, Karl is super passionate about the industry and the community opportunities that electric vehicle adoption will afford.

Tamra: We had a really fun discussion with Karl and he was incredibly generous with sharing inside tips for building and growing a successful EV program. For this discussion, we have a unique insider's view on how to successfully engage a community on electric vehicles from auto dealer interactions to very targeted programs that will help educate the community about this emerging technology and from terrific STEM programs in the classroom to commercial fleet management.

Here's our discussion with Karl. I know scenario planning is a really important part of a utilities planning process, and certainly for something like electric vehicles, how does Austin Energy go about doing that? And what are some of the most important takeaways that you guys have really distilled from that planning process?

Karl Popham: From a scenario planning perspective, I think one thing I think that's important for utilities to understand is really what a great opportunity EV load is in your territory. One thing that helps us is we know on average, every EV that comes into Austin Energy is equated to $385 of new revenue per year. What does that mean for the city of Austin and Austin Energy?

If we're able to roughly maintain our market share, and we look at the ERCOT LTSA, which is scenario assessment for the entire state, what that means for us is by 2023, 20 million a year, by 2030, 231 million a year. It's that growth revenue perspective and when you look at forecasts as scenario planning, I think it's very important for us in utility space to really differentiate between low growth and new load. EVs have a completely different low profile than traditionally. Here in Texas, we really focus a lot of our infrastructure around summer peaks and air conditioning load where EVs does a lot more charging naturally at night.

It doesn't have the same seasonal spikes as air conditioning does. We also found out through some pilot programs and it also makes sense people are much more comfortable with shifting that load around as long as the car is ready in the morning. As part of an RPE grant that we did as a pilot, we had both EV and air conditioning, which is the typical demand response program for utilities.

We ran it through the summer and when we shared load, we got the expected amount of opt-outs from air conditioning because sometimes people are one-degree warm, they'll opt out and will turn it down. We had exactly zero opt-outs all summer from the program from EVs. People just did not opt out of the program. I think it's important to look at how different the shape is, how utilities can plan for it and then one other on the opportunity front, how much batteries is associated with EVs.

The new average now is going to be about 80 kilowatts, 75 kilowatt hours parked in the garage. For residential customers, we also know 95% of the time that car is parked, cars only use on average 5% of that time and of that 5% of the time, 1% is looking for parking. It's a very inefficient, actual usage of the assets, so you have a sunk cost and a great asset that utilities and customers are willing to work with.

If you look at any forecast in battery storage, so let's look at the Bloomberg NEF forecast, 80% of all battery storage is going to have wheels attached to it, moving forward. Only 20% is stationary in electronics, and a lot of utilities focus on that stationary storage. I would argue, and we've had pilots that also help argue the point that, that batteries can be ubiquitous in your territory and it really is once again, another great opportunity for utilities to leverage in their portfolio.

When I talk to utilities, especially smaller rural utilities, where should I get started? I'd say the number one thing you can do is just outreach and engagement. It's the lowest cost of entry. It also starts putting your customer's mind as you as a strategic thinker and partner and accelerator of this movement. It also puts you in a leadership position, the old adage when decisions are made, you're either at the table or on the table.

I would recommend being at the table so you're not reacting to maybe some policy directive or law that you really weren't involved in, and there might be some unintended consequences. By having that strategic leadership and thought leadership and engaging your community, you know, helps make sure you're at the table.

Teri: There's windows of opportunity, right? Because the buying is going to happen throughout time, right but making sure you're part of the conversation. I think that's a really good point.

Karl: Buying is going happen whether you like it or not. We took the stance is we see such an opportunity here in Austin. We wanted to accelerate that curve. What we wanted to do is we saw such great goals around our strategic goals around financial health, that 385 per EV, but also in grid integration, grid modernization goals, also customer engagement, also in equity. There's a lot of alignment and customer experience. There's a lot of alignment with our strategic goals and what a good EV program can bring to the table for your community.

Teri: When you're thinking about it and you think about this deeply, and we think about, as Austin Energy goes through that process of thinking about who's going to adopt? What have you found? You went through this customer outreach and education, but in your own findings, on understanding who's going to adapt, what does that look like?

Karl: We have quite a bit of data on this right now. We have in our territory about 14,000 EVs in our territory. Without a doubt, the early adopters were higher, affluent and educated buyers. Those are your typical early adopters. We also found a very strong correlation with people who purchased rooftop solar or even community solar programs were your first ones by far to be those first people to buy into those EVs.

Our big emphasis now is to get past that early adapter phase and really move into mainstream. We think there's a very healthy used car market. That's why we also have EVs for everyone, which is about equity in inclusion and pushing. I just want onto our buyer's guide that we published here in Austin, ev.austinenergy.com, saw a low mileage first-generation lead for $6,200.

Those are basically maintenance free and if that's your commuter car. We really think there's a good story to be told in getting past that. If you typically look at hype cycles and adoption, you want to get about 3% of the market and that's where you really will you see that hockey stick acceleration. Here in Austin, we just exceeded per month, 3.5% of the market. Austin sells about 350 EVs per month. That's out of generally a 10,000 new car sells.

We just recovered from achieving better numbers pre-pandemic, so we've completely recovered from the pandemic as far as you see, EV cells. We think we're right at that hyper acceleration combined more importantly with some new models coming out in the US but Texas is a truck and SUV market. EVs historically competed for 37% of the US market that's who likes the market. You're trying to get a fraction of a fraction to really get your growth. With the launch of the cybertruck, which is being produced right here in the Austin area, with Ford F-150 going electric And I'd also put Rivian in that category.

Tamra: The Ford F-150 being the number one seller in the truck category, so that's important, right?

Karl: Yes having an electric Ford F-150 cannot be underestimated. What we see is when we see a popular model come to market, we see a big bump. Austin was cruising around 100 and 150 EV sells a month, when the Tesla three came out overnight, we doubled to 300. Just because of that one vehicle, we see the same kind of jumps on the near horizon with these electric trucks and SUVs coming onto the market.

Tamra: Can you talk a little bit about some of those programs in particular, and a little bit about your EV side and how that's really helped guide it and sort of craft a message to your customers that you're doing this to support them and to support the utility in the state of Texas as well?

Karl: We launched pluginAustin.com to really reflect this is a community goal and a community aspiration. It's not this utility-led thing, even though under the hood it is but from a marketing perspective, we really want to promote this idea. We would have these great visuals, and in very small print, I would put in plugin Austin.com. Now that would refuse and it still does to this day, you can go to plugin Austin today and see all our programs now rebates and work. That was 1.0 and then as we started seeing more awareness, we're now in what I call version 2.1.

In marketing, we've launched StEVie, the EV loving T-Rex, a very popular mascot and icon, but the videos of StEVie also very informative and purposeful. They look frivolous, but they all are based on a message we heard from talking to people of myth-busting. One is being for example, you need some sort of special infrastructure to plug in. The number one way Austinites plug in their EVs is in an outlet. What utilities call level one, what everyone else calls a wall outlet.

We have a video where StEVie plays drums and this T-Rex is playing drums in a band, and they plug in their amps, plug in the guitar, and then you plug in the car in the same kind of thing just to show how easy this is, that these cars just to get that that visually. Also, when you look at our buyer's guide, ev.austinenergy.com we have just exceeded 10,000 unique visitors a month. When you're getting 10,000 unique visitors a month in a market that's selling 350 a month, you're really providing value and that is a call to action.

When you go to ev.austinenergy.com you can look up the exact vehicle, I want to buy this, click and then you're paired with an auto dealership specifically and EV specialists at the auto dealership to facilitate that sell. The fact we're pushing through 10,000 unique visitors in a 350-a-month market, we're very pleased.

Teri: Now does that perspective sort of change, when you think about a lot of this that residential outreach personal use, you talked at the start about outreach and engagement. How does the equation change when we think about commercial fleets? When we think about this and understand, is there a different approach, different incentivization structure? How do you think about the commercial fleet and electrification there?

Karl: The primary difference between a consumer buyer and a fleet manager is consumers look at sticker costs, fleet managers look at total cost of ownership, that is the fundamental difference. That's how you approach a fleet manager. Also the reliability and how they're going to manage these vehicles.

One thing that you can do is just electrify your own fleet. Here at the City of Austin, phase one is 333 EVs and phase one we're 200 plus and rapidly growing and the analysis from our city fleet services is that those 330 vehicles will save the city of Austin $3.5 million over 10 years, that includes infrastructure costs, the level two infrastructure costs if they're going to buy.

There's no longer misnomer of you want to have these clean, emitting no tailpipe, no fuels in your community or save money, you can truly do both. When we presented the plan to city councils, one of the few things at that time that got unanimous approval because there really was a win-win. I would also say one of the most visible items a city has and what I would say I get this from my friend and colleague who's the city Safety Services Officer Jennifer Walls.

She argues the most visible thing a city does is have vehicles in your community, whether it's their trash coming every week, or they see the police or they see the fire, they see city vehicles and so you're leading by examples. The other fleet we have been working very closely with is CapMetro. CapMetro has made a public statement the CEO they will never buy a fossil fuel bus again. There are 12 electric buses and going, so how we help them as a fleet is we help them design a electric bus depot in North Austin.

It is EV-ready to support up to 200 electric buses and when I say EV-ready, it is you don't put all the infrastructure upfront and have all that costs and depreciation upfront when you don't have the buses, but all the conduit and the transformer's done such a way to support 200 and then you let the infrastructure grow as that bus fleet grows. We also launched a pilot tariff for public EV charging providers, as well as fleet and that tariff energy charges 0.00.

There's a fixed fee but the 0.00 energy charge really encourages high efficiency in usage of those stations. What we don't want is one station that's used 10% of the time it's forgotten. Having a 0.00 energy charge helps promote that efficient use of charging stations. I just end on one last kind of note is one other thing we did in Austin, we really want a robust market competition in our territory.

We petitioned and city council approved the change in city code to clearly allow these third-party charging infrastructures whether it's Electrify America, EVgo, Tesla, et cetera and while I'd say that's important, as [unintelligible 00:16:15] told to do is these infrastructure providers are great new commercial accounts in your territory. We have a, what would be considered a very small DC fast, how about just take it, for example, one on South I 35, it's about eight DC fast from a third-party provider. Their kW is around 550 kW and a fully recoverable commercial account and they're only taking about a 1000 square feet of density.

They turn eight parking spots, 1000 square feet and a back lot that had zero energy interest, zero energy revenue, and put it to the equivalent of a Target big box store as far as looking at kW and what kind of importance that is for utility, especially when your geographic define and a dense utility like Austin Energy, it's great to see that density and you're predefined because these are great commercial accounts that really won't help the bottom line as well as your other goals. At the same time, they're being placed in spots that you might have a light or something, but other than that you're taking something out of zero revenue and putting in something pretty significant almost overnight.

Teri: We'll be back in a minute with our interview with Austin Energy's Karl Popham after this message from CoBank.

[music]

Michael Anthos: Hi, I'm Michael Anthos from Cobank Farm Credit Leasing. From electric vehicles and EV chargers to solar batteries, CoBank Farm Credit Leasing can meet your financing needs while allowing you to make the most of your cash on hand. Tax-exempt, nonprofit organizations like electric co-ops are typically ineligible for government EV tax rebate programs. Finance and EV for nothing down with Cobank Farm Credit Leasing, and we'll help you monetize tax credit through a lower monthly payment than you would with traditional financing options. Contact your CoBank Relationship Manager for more information and a free quote.

Teri: We've talked a little bit about residential, we've talked about commercial fleets. You also make mention a reference to the city bus program, but how could this cover school buses?

Karl: There's a lot of benefits by having no tailpipe emissions on our kid's school buses just due to the NOx alone. What we're also finding out with people who ride electric bus and this is one of the other reasons CapMetro really wants them is the customer experience goes way up. People who ride electric bus have the same customer experience happiness as a light rail, which is a significant step over a diesel bus. Stock complaints of diesel bus is heat, smell, and noise. The EV bus gets rid of all those.

We have a program called EVs for schools, which works with our local school districts to educate fourth graders to seniors on what sustainable transportation in EVs looked like. One of the things we did when we launched in four pilot schools, it's this online curriculum. It's [inaudible 00:19:33] was charging infrastructure for the teachers and staff that can be also used in the curriculum as part of their science-based training is a really cool program, but we launched it in Title One schools, which had the majority of kids come from low-income schools, that was important.

That's part of our larger equity, EVs for everyone program, which I think is also important to consider when you're launching these is making sure EVs are for everyone and just not catered to the early adopters or more affluent. Since we launched in four schools, it is now in 132 schools and Central Texas, 735 teachers have been trained on it, it is available free online to parents because there's all this virtual learning through this EcoRise platform.

What we want to do is we just want to influence and educate our future leaders. It's all about that early adoption future leaders. Then they have that when their parents are getting a new car, they just completed a class on sustainable transportation, EVs. They're going to ask the question, "How come we're not getting EVs or here's how easy to plug in?"

Teri: Is there anything we've missed, do you think from your side, in terms of that we didn't put together in the initial questionnaires?

Karl: We were having some frustrated customers coming back and I tried to buy an EV and it was really hard to. Unless you're going to a Tesla showcase, which is a very great experience. It was real hit or miss. Utilities could very easily say, "Well, man, I hope they fix that." What's utility's role in that? As a startup and what startups do is they focus on market share, because we know what the revenue is at 385 EV.

As a startup embedded with a utility or a startup mindset where you're like, "Well, how can we fix that? That's where we launched the buyer's guide, and that technology platform to help encourage that adoption. We're getting up to 10,000 unique visitors to ev.austinenergy.com. If you want to put that into your community as well, we have to tell you with the technology providers, how it works, how to engage the auto dealerships.

One lesson learned is when you do the kickoff meeting prior to launching, you get your Mayor to host a barbecue lunch with auto dealership managers throughout and they show up. They show up and the conversation has definitely changed when we launched the program back in 2011. When we were first reaching out, it was very lukewarm most of the dealerships. We have a few champions like TownWork, Nissan and whatever, but they now see that future.

I think the buyer's guide platform is very well timed for the pandemic, because they're realizing the old sales model people coming in, shaking hands, sitting in the office, having all that face. There's a lot of buyers who want to do it online and want to do it remotely, not have that experience that you just want to go up and pick it up or have that car delivered. That's what this platform really allows you to do, is look at all the vehicles in the territory and say, I want this. It's a completely different experience. A lot of people want that experience.

Teri: We definitely had to pivot over the past year and I love the example that just actually bring barbecue. This might be a Texas phenomenon, but my sense it's going to be a national hit. I mentioned you were passionate about your program, passionate about electric vehicles and you never disappointed the theme of continued outreach and engagement, certainly stressed. Karl I want to thank you for your time today. Really enjoyed hearing from you.

Karl: My pleasure being here with you today. Thank you so much for having me on the show.

Tamra: Teri, once again, we're hearing a strong message about the need and urgency for community engagement. Most major household purchases can occur abruptly and under stressful conditions. Making sure to have a smart engagement program, which includes electric vehicles is really critical for our rural electric co-ops. As Karl highlights, the single number one factor in making a difference in your community, is achieved through outreach and engagement. The added juice is you're either at the table or on the table.

Teri: That's right. Austin Energy found that there's a pretty significant upside attainable from the strategic goals they established for their community engagement. For the relatively mature electric vehicle program, which started a decade earlier in 2011, there are over 30 distinct program initiatives.

From a financial standpoint, this organization realizes about $385 per electric vehicle in their community, but they also benefit from grid integration and monetization, and also building equity in their community. Frankly, they make their customers happy. I know Karl mentioned that there's a lot of alignment with our long-term strategic goals and a good EV program can really bring something to the table for this community.

Tamra: I don't think we can emphasize enough how important it is for our co-ops to envision and plan for a future where an increasing number of vehicles on the road will be electric. Maybe more to the point where their go-to fill up service station will be their local electric co-op. I hope that all of you will join us again next month when we can change gears and talk about equitable, clean energy development for rural communities.

Keith Taylor: I think the fundamental challenge here as we think about an energy transition, is for rural communities to find strategies that are going to enable that transition to happen with rural communities rather than to rural communities.

Teri: That's right. Some of the country's largest and most advanced renewable energy projects have been deployed by rural electric co-ops. We're going to celebrate that success next month. Please join us then.

[music]